Hello, everyone and thank you for joining the FREYR Battery Third Quarter 2022 Earnings Conference Call. My name is Daisy and I will be coordinating your call today. [Operator Instructions] I would now like to hand the call over to your host, Jeff Spittel, Vice President of Investor Relations to begin. So Jeff, please go ahead.

Good morning, good afternoon and good evening. Welcome to FREYR Battery’s third quarter 2022 earnings conference call. With me today on the call are Tom-Einar Jensen, our Chief Executive Officer; Jan Arve Haugan, our Chief Operating Officer; and Oscar Brown, our Chief Financial Officer. During today’s call, management may make forward-looking statements about our business. These forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from expectations. Most of these factors are outside FREYR’s control and are difficult to predict. Additional information about risk factors that could materially affect our business are available in FREYR’s F-1 and Annual Report on Form 10-K filed with the Securities and Exchange Commission, which are available on the Investor Relations section of our website. With that, I will turn the call over to Tom.

Thank you, Jeff, and good morning, good evening and good afternoon, everyone. Pleasure of course, as always, to be speaking to you in this, our sixth earnings call since we went public on the New York Stock Exchange for our third quarter earnings report for 2022. During today, we will go through some refreshments, so to speak, on what we’ve been doing to date. We’re going to refresh you on what we’ve done in terms of selecting technology. We’ll give you an update on where we are, talk about the market dynamics, which is accelerating in front of our eyes. I had the pleasure, of course, of announcing our Giga America ambition to the world a couple of days ago. I just revived back from Atlanta. We’ll talk about that. We’ll talk about our strategic partnerships, and I will take you through updates on the operational side. Oscar will take you through updates on the financial side, I’ll sum up with strategic priorities before we turn to Q&A. So FREYR is a company that went public on the New York Stock Exchange on the eighth of July last year. We built our company around 3 core tenets of speed, scale and sustainability. And everything we do is linked to these 3 things. And the last quarter has fundamentally supported that ambition as we have demonstrated through moving forward at pace both on the commercial side, on the operational side and on the strategic side. We offer differentiated exposure to the secular growth trends in the battery market, and we are an increasingly selected partner of choice in providing clean battery solutions. We are on track to becoming a global leader in this space. We have captured a large part of the nascent, but rapidly growing ESS market, and we’re now…

Thanks a lot, Tom and hello to everybody. As you can see now on Slide #12, we are ready to give you the update from the Customer Qualification Plant. But first of all, I am glad to inform you that we have yet another quarter without any reported serious safety incidents, and I will come back a little bit to that. A couple of minor incidents has been reported. But the current workforce at the construction site in Norway is now approximately 100 persons at the Customer Qualification Plant and close to 50 at the construction site for Giga Arctic. As the work hours is growing and more complex installations and work is elevated above ground, safe job analysis and multiple disciplined coordination is rightly important in order to have a safe and secure workplace. As we noted in our previous earnings calls, we are progressing according to the schedule. But of course, we are not immune to the challenges, both when it comes to logistics, COVID-19 lockdowns and scarcity of semiconductors. At the same time, this is actually what we are planning for. And this is – it’s the way we solve these problems that shows the way we are securing delivery, and identifying workarounds in order to mitigate delays and cost consequences. Therefore, I am very glad to inform that the first important milestone was met last week when we, at the site in Mo i Rana, managed to have the site acceptance test for the milling machine, which is part of the upstream powder handling and this system is delivered by Nippon Co [ph] from Japan. As you saw on the third page of today’s presentation, there is a team from South Korea from Hana Tech, which is now performing the installation and mechanical completion of the…

Great. Thank you, Jan Arve. Moving on now to the financial update slide of the earnings deck. I will review our financial results for the second quarter and the first 9 months of 2022, as well as provide an update on our financing initiatives. For the quarter ended September 30, 2022, FREYR reported a net loss of $93.8 million, or $0.80 per share compared with a net loss of $45.4 million for the same period last year, which was also the quarter that we listed on the New York Stock Exchange. For the 9 months ended September 30, 2022, the company reported a loss of $124 million, or $1.06 per share. It’s important to note that $70 million of the loss in the third quarter of 2022, and $46 million of the loss for the 9 months ended September 30, had to do with a non-cash warrant liability fair value adjustment for those periods. As highlighted in our last earnings call, this liability moves around period-to-period based upon, among other things, the company’s stock price at the end of each period, generally reporting gains when the stock declined as was the case in the second quarter, and losses when the stock rises as was the case in the third quarter. Our stock price was just under $7 per share at June 30, and just over $14 per share at September 30 of this year, which resulted in a significant third quarter non-cash adjustment. More importantly for today is our cash investment rate. We spent net cash of $70 million in the third quarter compared with $36 million in the second quarter, and $147 million for the first 9 months of the year, ending the third quarter with $419 million of cash and equivalents, and no debt on the balance sheet.…

Thank you, Oscar, and thank you, Jan Arve. You both make my life a lot easier, of course. So thank you very much for your dedication to the company and for your 24/7 focus on making us into the global champion we aspire to be. Let me summarize by repeating our key priorities. First of all, we are hard at work in achieving the milestones required to complete our financing efforts, which really resolves around producing sample cells in the Customer Qualification Plant in the coming quarter. This will unlock the Giga Arctic project financing, and will also accelerate technology adoption, not only with our existing customers, but also with additional customers in the commercial vehicle and EV space. We are seeing broad interest that Oscar mentioned in participating in the capital formation journey for FREYR, and we’re evaluating several options to figure out how we can grow in both the European and the North American realm, so to speak, in terms of becoming a global champion for battery cell manufacturing. We are clearly focusing on convert not only expanding the conditional offtake agreement, but also converting the ones we have into long-term sales agreements, and we’re seeing deep interest across the board to both upside and accelerate that development linked to the development of the Customer Qualification Plant. We will be executing multiple projects in parallel; we have a team in place which have experience in both planning, executing and operating multiple highly complicated multibillion-dollar projects in the energy and energy-intensive industrial space, and therefore, we are confident that we will be able to both develop, finance and operate multiple facilities in parallel. Right now, our main focus is, of course, on the CQP and Giga Arctic. And Giga America will follow in it fields as we are evaluating and developing opportunities on the upstream side and the downstream side with our partner Nidec in particular, on module packs and with containerized solutions for energy storage applications. We are a partnership-based organization, and we will continuously forge new partnerships along strategic operational and financial access to enable our initial Giga development ambitions in Norway and America, but there are more opportunities that are being forced as we speak, but we will take one step at a time and move fast forward. So in short, we’re validating, we’re scaling our technology. We’re financing it. We’re executing it, and we’re delivering on our ambitions roughly in line with what we have communicated to the market so far. So with that, I want to thank all of our investors that have stayed with us on this journey. We are looking forward to the future and look forward to updating you on a running basis on improvements and progress as they emerge. Thank you very much for your attention. And with that, I turn it over to Jeff to take us through the Q&A. Jeff?

Thanks, Tom. We’re ready to open up the line for questions.

[Operator Instructions] Our first question today is from Philipp Koenig from Goldman Sachs. Philipp, your line is open. Please go ahead.

Yes. Hey, guys. Thanks so much for taking my questions. My first question is on – it’s just a bit on the progress on the financing. It seems like the CQP is a very big piece to unlock both the project financing, and also potentially some other things. What about converting some of those offtakes into sales agreement? Is that also part of the agreements you have with some potential lenders in terms of unlocking some of that financing? And is there any timeline you can give us on that as sort of end of Q1 or early Q2 sort of the timeline you’re targeting when you start financing – unlock the financing for Giga Arctic? And then beyond that project financing, you mentioned that you’re also looking at other strategic options. There was an article in the press yesterday about a potential private equity investor providing you with some financing efforts. So is that something that you’re looking at? And is that something that’s where we could expect maybe some news before the end of the year? And then my last question is just on the relationship with Koch in the U.S. Is it still a 50-50 partnership? Or are you taking more control there? And what does that mean sort of for your progress on Giga America? Thank you very much.

Thank you, Philipp. So this is Tom. Let me address some of these questions, and then I’ll turn it over to Oscar to chime in on some of the more financial aspects of it. So first of all, we don’t comment on rumors in the market, just to sort of be clear on that. But let me sort of pass some commentary to the customer side. So as we have explained previously, we fundamentally believe in a strong market short environment emerging especially in the ESS space, ESS producers are being crowded out to a large extent by the massive EV demand. This, of course, does hint to when we’re up and running that we can reserve a large part of our capacity for merchant sales. At the same time, we also need to document and demonstrate bankable cash flows against the project finance efforts that we’re undertaking. And therefore, we are now noodling around this 60% long-term offtake mark with our customers for Giga Arctic and subsequently for Giga America. We don’t see any material challenge in having sufficient demand to meet those objectives. Of course, our customers have specific requirements as any customer for any battery cell manufacturing facility would have in terms of us documenting and demonstrating that the products, we actually will shift to our customers to show the characteristics that we promise. The good news on that one is that our first legally binding contract with Nidec Corporation for 38 gigawatt hours that we announced earlier this year, which have options to upscale both in absolute volumes over the period up until 2030, but also extend it beyond to sort of match it more against the tenor and the project finance Those volumes, of course, are based upon the initial activities that we have embarked…

Yes. Thanks, Tom. So I think you hit it pretty well. I would just add that the balance between the long-term offtakes and merchant sales really comes to just – we see better economics, of course, in merchant sales. And the long-term contracts require a little bit of less pricing aggressiveness on our side to get those contracts in place. And so there is a balance between the two in our different debt service coverage ratios that we’re negotiating between merchant sales, which are more profitable and long-term offtakes, which are a little less profitable, and managing the two to get to the right debt sizing. So that’s really the dynamic that we’re working through. You also mentioned on Koch side, we have taken control of the JV, so we own more than 50% and we will be consolidating it going forward. They have been a really great partner in the development, they continue to be a good partner in the development of Giga Arctic, and then the site – sorry, Giga America and the site selection and then everything we’re doing, but the great part about where we sit today is now we can bring in partners that align better to actually having their own battery cell demand that they can use or other strategic and financial partners to finance this very big project over phases.

Thank you very much, guys, and best of luck going forward.

Our next question is from Maheep Mandloi from Credit Suisse. Maheep, your line is open. Please go ahead.

Hey. Good morning and thanks for taking the questions. On the U.S. plans, could you just talk more in detail about what talks you are having with customers? And in the past, you talked about potentially having a contract or a pipeline with U.S. customer, large U.S. customer. Would that now be kind of service with this factory or Norway factory, and any other details on that customer would be appreciated?

Good morning. So, as we have announced previously, we have announced multiple customer arrangements already, some are named, some are not, and some of them are clearly sort of U.S.-centric. But what I can say, generally speaking, is that in the ESS space, in the U.S., in particular, there is a lot of momentum around rolling out gigawatt hour scale ESS projects all over the country. And this is obviously something that offers opportunities to companies that want to have certain exposure upstream to that, let’s say, for us, downstream development. So, there is multiple opportunities in the existing customer grouping in this regard, both in terms of participating in Giga America per se, if that was to sort of be something we wanted to consider, but maybe more importantly, to forge upstream partnerships and downstream partnerships from cell production with companies that want to have security of supply and having product development for end applications and/or input factors into cell production located close to one of the larger cell manufacturing facilities in the U.S. So, if we – so we will obviously come back to the market with specific updates on that when we have formalized these relationships. What I can say is with the announcements, and obviously, leading up to the announcement, the intensity of those conversations, not only with our existing partners, but also with a broad variety of new ones has increased quite significantly. So, this is obviously for FREYR is becoming an asset that we will leverage in a maximum way to both strengthen our industrial development and strategic development and potentially financial development as well. And we will come back to the market with details on this when we have concluded some of these agreements. And we will do that on a running basis, of course, when they are concluded.

Thank you. Our next question is from Nellie Estler from Clarksman Securities [ph]. Nellie, your line is open. Please go ahead.

Hi guys. Thank you for taking my question. I was wondering if you could give just color on two topics. So, first is a broader question about your strategy. I have been following you for some while, and it’s my understanding that you have been very vocal back work mainly on ESS and potentially OEM deals. But then with the 3Q, I have been pressured with OEM build to be close. So, where could we see prior couple of years? Will we see a company doing sort of 50-50 EDSS, or how do you see yourself in, let’s say, 3 years, 4 years? So, that’s the first question. And my second question is regarding Giga America. You mentioned there is $410 million financial incentive package that you secured, and could you share some light on this and further detail?

Yes. So, thank you for this. Let me take the first question, and then I will pass the other question over to Oscar. So, on our strategy, we have always said, by the way, that we want to target all market we are close, but we are focusing our efforts initially on the ESS market for the reasons that I have been through in the presentation. That’s both a technology rationale and that in that 24M technology. However, competitive against conventional technology across all verticals in our opinion over time, especially competitive for the ESS market since we can build much larger integrate that growth. But we do see now that we can use the same form factor that we are using for energy storage applications for select commercial vehicle applications. So, think vehicle applications that don’t require fast charge, but can sort of charge overnight and have one or two charge, discharge cycles per day. This is a technology that is ideally suited for that. And we already have indications that we can slot these cells directly into modules and packs that fit into these commercial vehicles. So, then of course, we are also always been in deep dialogue with most of the electric vehicle manufacturers, not only from a 24M perspective, but also from potentially other technology solutions as well. And this is something that we will continue to mature, and see how we can sort of play into this space as well. We do believe that all of these stakeholders will increasingly want to regionalize or localized security of supply and being a stakeholder that is advancing now in two geographies simultaneously, is also increasing, let’s call it, the optional value of FREYR as a supplier for many of these stakeholders. So, you should expect moving forward to gradually or not – well, to continue to accelerate and increase our ESS penetration while we are gradually picking up the pace in the electric vehicle space. And the commercial vehicles will be somewhere in between there. I think we will actually have more demand and then we will have capacity to build at least in the short-term. So, it’s going to be a continuous optimization journey, as we have been saying all along. We optimize the value. We try to optimize what products we produce in a flexible production platform. We are also agnostic or let’s say, flexible in terms of what we actually produce where. But now we have secured prime industrial acreage in Giga America which, of course, together with our position in Norway and previous established rights to acreage in Finland gives us deep flexibility in terms of providing differentiated product offerings across the entire market segment. But with that, maybe hand it over to Oscar to provide some color on the incentive scheme in the U.S.

Thanks Tom. Yes. So, on the $410 million incentive package, that tied to spending, of course, and jobs creation. And the combination of incentives are some level of grants for things like the acquisition of lands as an example. But some of those brands are over time. But mostly their tax abatements around sales tax and also county-level property taxes and related taxes. And again, it’s really tied to the total spending package of really the multi-phase project over the next several years, quite a few years for the $2.6 billion total spend that the package is tied to. So, it’s spending on plant, equipment, all the phases, and then job creation is how you realize those incentives over time.

Thank you. Our next question is from Gabe Daoud from Cowen. Gabe, your line is open. Please go ahead.

Thank you and hey everybody. Thanks for all the prepared remarks. Tom, I guess I was just curious if you could talk a little bit about maybe some of the supply chain issues that or maybe no issues, but that are maybe impacting things. You mentioned there is still some equipment that needs to be delivered at CQP by the end of the year. So, I guess I was just curious if you could discuss a bit on what you are seeing around supply chain. And also on the labor front, if there is anything to note there as it seems like at least here in the U.S., some folks have been highlighting a shortage of key talent.

Yes. So, it’s a great question. So, the three – let’s call it three attributes to that one in terms of resources to do all of this, right. So first, machinery to CQP, as Jan Haugan mentioned, we will have the latest kit delivered before Christmas. And then we will start to connect the dots, so to speak, on all of it immediately after New Year. So, there is no sort of delay or any significant kind of issue when it comes to having the machinery on site. We already started to mix cathodes and anodes material in the slurry mixing, etcetera. We will be heating up, so to speak, the formation and aging machinery and so on. And then we will be implementing the casting and unit cell assembly machine, which is the heart of the whole thing. And that is, as I have said, scheduled to be delivered before Christmas. So, we don’t see any real issues related to that. Of course, it’s not trivial, any of this. Electrochemistry is hard. But we have very detailed plans, very strong support from a broad variety of stakeholders, including existing licensees at the 24M technology that has sort of been through this journey, plus of course, the own expertise that we have in-house plus the expertise from 24M. So, we are sort of working quite diligently across multiple verticals to ensure that we can rapidly start producing these initial cells. Then of course, it’s the raw material front. And as we did mention in the report, we have secured nearly all raw materials we need for the CQP up until 2028. We have secured it completely for the first couple of years. So, there is no sort of issue there. And we are two-thirds of the way there when it…

Thanks Tom. I guess if I could – that’s really helpful. I guess if I could just also ask a follow-up on the – maybe shifting gears to the technology side. You mentioned the 24M cells exhibiting top quartile energy density. I was just curious if you can maybe provide a little more color on that? And then also you noted how the technology is applicable to certain applications within automotive, maybe more so commercial versus passenger. But then I was just curious on the testing front, if there is anything you can talk to around the technology that you are eyeing for that end market? Thanks everyone.

Yes. So, on the testing, we will be working with our customers to sort of provide and more specific updates to the results of that in the coming – in the near future, so to speak. But we did see that we were on the top end when it comes to gravimetric energy density. And then we are seeing very stellar safety performance of the tests. These are LFP cells of decent sort of, let’s say, form factor size and we are building them slightly larger. But the safety test in particular was stellar, which is very encouraging. But even though we have really just recently started the optimization journey on the cathode and the anode side for our LFP cells, we are already seeing tests that sort of show them in the first quartile, so to speak, relative to conventional. And this is of course, extremely encouraging as we also have a broad variety of optimization opportunities of our sleeve, so to speak, which we are of course, testing and working on as we speak. And this is also something that we will be using in the Customer Qualification Plant to continuously try to optimize the products that we push to the market. So, that’s kind of on that front. When it comes to the applicability in electric vehicles, I think it’s fair to say that there is a lot happening in this regard, which we are not at liberty to disclose any details around at present. But generally speaking, the 24M technology is superior when it comes to lower C-rate applications, meaning a slower charge and discharge. Remember, most batteries have actually a quite slow discharge. Discharging all your energy over half an hour in a car, you wanted actually to last for at least six hours, seven…

Awesome. Very helpful. Thanks everyone.

Thanks Gabe. Daisy, I believe we are ready for one more question please.

Of course, our last question today comes from Tyler DiMatteo from BTIG. Please go ahead. Your line is open.

Tyler, can you hear us?

I believe Tyler has just disconnected. So, I will hand back over for any closing remarks.

Great. Well, thank you all for your interest in the company. We look forward to catching up with you over the next several days. Please feel free to reach out with additional questions. And then we will see you on the road this quarter. Thanks for your time.